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Fenton van plant to lose one shift in Chrysler cuts; pickup truck plant unaffected

(UPI file photo/Bill Greenblatt)

By Maria Hickey/Bill Raack, KWMU

St. Louis – As part of its restructuring DaimlerChrysler announced Wednesday that it will cut a shift at the south plant in Fenton.

That means a loss of about 1,300 jobs some time next year. The south plant produces minivans.

The news was somewhat better than expected. Analysts had predicted that the north plant, which manufactures Ram trucks, might be closed.

Fenton Mayor Dennis Hancock says he doesn't expect much of an impact on the local economy.

"We just don't see it happening," he said. "There will not be any impact to any of the tax jurisdictions as a result in the reduction of property taxes because the equipment will still be there."

The automaker announced in 2005 that it would invest $1 billion to introduce flexible manufacturing equipment at the Fenton plants.

The city of Fenton and the state of Missouri offered Chrysler millions of dollars in tax incentives to get the company to invest in the new equipment.

Juli Niemann, an analyst with Smith, Moore and Company in St. Louis, says despite those incentives, more cost-cutting moves are probably on the way.

"The fact that they do have these concessions from Fenton is a positive but even when those concessions were granted the industry was already in a tailspin," Niemann said. "So this was basically tossing a lead life preserver."

Niemann says it is inevitable that Daimler will spin off or sell Chrysler.

In the meantime, Mayor Hancock says new suppliers attracted by Chrysler's investment in the plants likely will be able to absorb many of the 1,300 cut workers.